Everyone knows that the Federal government still treats marijuana as a Schedule I drug and that investors in cannabis businesses are arguably at risk.
But what everyone does not know is that small investors are legally permitted to invest up to $2,000.Equity crowdfunding allows cannabis startups to raise seed capital from small investors in exchange for a share of the business.
First Insight
Every cannabis company needs a bank account. Banks still do not like marijuana businesses. The crowdfunding platform 420fundme, for instance, was shut down for 30 days after all its banks declined to keep working with it.
Second insight
It is not always easy to invest in cannabis companies. Many if not most cannabis companies require small investors to be “qualified” or “accredited.” This provides legal cover for the cannabis companies but it also means that ordinary investors cannot invest in or sometimes not even hear about many cannabis opportunities.
Third Insight
Read the rules. Make sure you understand the rules, state and Federal. Fail to fully comply and you will not be able to defend potential investors’ actions against you whether or not they invest. And if you do raise investor funds you will not be able to defend demands for immediate return of the money.
Ready to Get Started?
Schedule your free 20-minute consultation on possible JOBS Act solutions for your company’s capital raise @ 415-320-5496 today.
